The Acting Secretary of State to the Embassy in the Soviet Union
716. Moskco 34. By not replying to our more recent requests for negotiation lend-lease settlement and return of ships SovGov has clearly [Page 670] failed to live up to spirit of lend-lease agreement. We therefore feel that, subject to following comments, vigorous representations should be made. We doubt however that it would be advisable to fix a definite number of days for reply since Russians might consider this an ultimatum involving their prestige.
Although it is of course only a technicality it can be argued that Russians are not in default since lend-lease agreement contains no provision for fixing specific date of settlement. Significant provision of Sov master lend-lease agreement for bargaining purposes is article 5 which provides for recapture of any or all lend-lease articles at end of emergency as determined by President. It would be possible for President at any time to determine end of emergency for purposes of article 5 in advance of a general determination of end of emergency. It has so far not been thought advisable to have the emergency declared over for such a limited purpose since other countries have negotiated lend-lease settlements and agreed to recapture of some lend-lease material without it. Should you consider it advisable to take such action prior to again taking up matter with Russians we will immediately make necessary request of President. It was our intention however to do so only in event Russians failed to reply promptly to our further representations. (Discussion of some of considerations involved in determination end of emergency are contained in memo to you from Clayton dated Feb 26.)
Shipments under pipeline are now stopped pending congressional action. Clayton has talked with congressional leaders along lines urtel 978, March 24,1 and although they agreed discuss matter among themselves and advise later, Clayton considers it unlikely they will agree make possible continuation pipeline deliveries to USSR. Even if enabling legislation were passed you would still be able to suspend shipments. Colmer2 and others have introduced measures in Congress to prevent all shipments to USSR including commercial until Russians act on ships and lend-lease settlement satisfactorily.
There is obviously little possibility of recapture of lend-lease material should Russians decide deliberately ignore our demand therefor although we could probably prevent any Russian lend-lease ships entering US ports from leaving, but only after declaration of end of emergency had provided legal basis for demand for return.
Our trade agreement with Sov Union provides for 6 months written notice of termination.3 Since bulk of Sov exports to US are duty free such termination would have little practical effect. Other than pipeline [Page 671] arrangement now in suspense Russians are not receiving any govt economic assistance.
Johnson Act would prevent private loans or sale of Sov securities in this country but it is doubtful whether it would prevent private sales on credit.4
Despite foregoing we feel that govt discouragement of sales to Russia by US firms would have considerable effect and would be seriously regarded by SovGov. We could place various types of other obstacles in way of their obtaining supplies in this country such as making it difficult for them to obtain shipping space. We could probably also utilize other means of pressure such as discouraging continued training of Sov technicians here and refusing issuance of visas to Russians employees of Amtorg.5
- Not printed; but see footnote 2, p. 668.↩
- William M. Colmer, member of the House of Representatives from Mississippi.↩
- Foreign Relations, 1942, vol. iii, p. 763.↩
- In telegram 717 further details on the Johnson Act were promised in a subsequent telegram. See telegram 753 to Moscow on April 1, 6 p. m., infra.↩
- Amtorg Trading Corporation, official purchasing and sales agency in the United States of the Soviet Union.↩